How has the HACK ETF averaged annual returns of 19%?

This unique ETF has delivered some impressive performance metrics in recent years.

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Key points

  • The BetaShares Global Cybersecurity ETF is a popular fund on the ASX
  • It is also a very unique ETF and has delivered some impressive performance metrics in recent years
  • Among HACK's top holdings are some extremely high achievers

Out of the myriad of exchange-traded funds (ETFs) listed on the ASX, the BetaShares Global Cybersecurity ETF (ASX: HACK) stands out for a number of reasons.

The first is the most obvious – what a ticker code!

The second is the fact that the HACK ETF is the only ETF on the ASX that solely covers the global cybersecurity sector. Other ETFs contain many of the same underlying shares as HACK does. But no others can boast the purity of HACK when it comes to the cybersecurity industry.

The third is HACK’s performance. The BetaShares Global Cybersecurity ETF has been listed on the ASX since August 2016 – coming up to six years now. Since that time, this ETF has delivered some objectively impressive performance metrics.

As of 30 April, HACK returned 16.67% over the preceding 12 months. Over the past five years, it has averaged an annual return of 18.83%. And since its inception, it has given investors an average return of 19.02% per annum.

That’s a performance that few other ASX ETFs could match. And that includes index funds like the Vanguard Australian Shares Index ETF (ASX: VAS), as well as other typical high flyers like the BetaShares Nasdaq 100 ETF (ASX: NDQ).

So how has HACK er, hacked it? How has this ETF delivered such consistently strong outperformance?

How has the HACK ETF been averaging annual returns of 19%

Well, a simple explanation would posit that cybersecurity is one of the world’s fastest-growing industries. As more and more of our lives become digitalised, individuals, companies and governments have had to dedicate more and more resources to the protection of their digital assets.

A deeper analysis tells us more though. At present, the BetaShares Global Cybersecurity ETF holds the following companies as its top five investments: CrowdStrike Holdings, Palo Alto Networks, Cisco Systems Inc, Zscaler Inc and VMWare Inc.

CrowdStrike shares are up more than 111% over the past five years.

Palo Alto shares have risen more than 280% over the same period.

Cisco is more of a laggard, having given investors a return of ‘only’ 44% or so.

Meanwhile, Zscaler shares are up 375% over the past five years, while VMWare shares are up 50.6%.

So with returns like those among HACK’s top holdings, it’s perhaps no wonder this ETF has been so successful. No doubt investors will be hoping that the next five years are equally fruitful.

The BetaShares Global Cybersecurity ETF charges a management fee of 0.69% per annum.

Motley Fool contributor Sebastian Bowen has positions in Cisco Systems. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended BETA CYBER ETF UNITS, BETANASDAQ ETF UNITS, Cisco Systems, and CrowdStrike Holdings, Inc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended VMware. The Motley Fool Australia has positions in and has recommended BETA CYBER ETF UNITS and BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended CrowdStrike Holdings, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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